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‘Ordinary’ Russians have little to fear from crisis – official

Posted by Kris Roman on October 25, 2008


Ordinary Russians will be not be greatly affected by the current global financial crisis, Russia’s Deputy Finance Minister has said.

“Of course, we can not say that we are completely protected,” Dmitry Pankin said on the Russian TVTs channel, adding, however, that ordinary people would only be affected to a “minimum degree.”

Pankin said that there would be no repeat of the 1998 financial crisis and added that the turmoil would affect most those people who had billions of dollars in funds or loans.

Russia’s August 1998 financial crisis saw the ruble lose two-thirds of its value in less than a month. Millions of people also saw their savings disappear.

“At this moment, we can say that we are unlikely to see the level of growth we had planned for next year. But to speak of some kind of catastrophe, to say that we are in for a second 1998 is categorically out of the question – the situation is entirely different,” he went on, pointing to Russia’s reserves and the development of the banking system.

He also said that these factors would allow the Russian authorities to tackle the problems caused by the crisis, and to ensure that production did not fall and that companies did not go bust.

“Companies can get loans, they can continue work,” he said.

Russia’s financial system has been affected by a global credit crunch which started in the U.S. and quickly spread to Asia and Europe leading to record losses on Russia’s financial markets and a liquidity shortage.

Russia’s two main stock exchanges closed early on Friday after they shed more than 13% as share prices tumbled around the world. Oil prices have also fallen dramatically.


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